WASHINGTON (Legal Newsline) — The Department of Justice announced Jan. 17 that Deutsche Bank has agreed to a $7.2 billion settlement after allegations it misled investors in the packaging, securitization, marketing, sale and issuance of residential mortgage-backed securities (RMBS) between 2006 and 2007.

 

“This resolution holds Deutsche Bank accountable for its illegal conduct and irresponsible lending practices, which caused serious and lasting damage to investors and the American public,” said then-U.S. Attorney General Loretta E. Lynch. “Deutsche Bank did not merely mislead investors. It contributed directly to an international financial crisis. The cost of this misconduct is significant: Deutsche Bank will pay a $3.1 billion civil penalty, and provide an additional $4.1 billion in relief to homeowners, borrowers and communities harmed by its practices.”

 

According to allegations, Deutsche Bank misled investors by representing to them that its RMBS fell in line with the proper underwriting guidelines. The department says Deutsche Bank admitted to revising the guidelines so that loans could be underwritten to anyone with “half a pulse.” The bank also purportedly covered up that it did no reviews to ensure borrowers had proper capability to repay loans.

 

“This $7.2 billion resolution – the largest of its kind – recognizes the immense breadth of Deutsche Bank’s unlawful scheme by demanding a painful penalty from the bank, along with billions of dollars of relief to the communities and homeowners that continue to struggle because of Wall Street’s greed,” said principal deputy associate attorney general Bill Baer.

Want to get notified whenever we write about U.S. Department of Justice ?
Next time we write about U.S. Department of Justice, we'll email you a link to the story. You may edit your settings or unsubscribe at any time.

Organizations in this Story

U.S. Department of Justice
950 Pennsylvania Ave NW
Washington, DC - 20530

More News